South Korea's consumer inflation weakened to a much better-than-expected 2.4 per cent in June, marking an 11-month low and providing some relief for policymakers grappling with rising prices. The inflation rate in June was down from 2.7 per cent in May and the lowest since July 2023. This figure was below the 2.7 per cent forecasted by economists surveyed by Reuters. The decline is attributed to easing supply-side pressures, with the consumer price index (CPI) dipping 0.2 per cent on a monthly basis after a 0.1 per cent rise in May. This marks the first monthly decline in seven months. Notably, prices for agricultural and petroleum goods fell by 5.3 per cent and 2.9 per cent respectively in June, dragging the overall index lower. The country's vice finance minister expects consumer inflation to stabilise in the lower to mid-2 per cent range in the second half of the year. He promised ongoing policy measures to manage prices. The Bank of Korea (BOK) echoed this sentiment, viewing the drop in inflation to the mid-2 per cent level as a positive development. The central bank will be closely monitoring inflation's convergence with its target of 2 per cent. The core CPI, which excludes volatile food and energy items, remained steady at 2.2 per cent year-on-year in June, compared to May. Attribution: Reuters
